Covenant sells terminal, boosts stock repurchase

Covenant Logistics announced Thursday it expects to realize a $45 million pretax gain from the sale of a California terminal and the company will repurchase up to $75 million more of its common stock.

The Chattanooga-based trucking giant said it will relocate personnel and equipment to another location in Southern California and cut operating costs by $500,000 a year with no disruption in service. The stock repurchase announced Thursday follows the recent completion of the previously announced $30 million 10b5-1 repurchase plan.

“With our latest 12-month return on invested capital in the double digits, and a stock price representing a single-digit P/E multiple and less than 2x tangible book value, internal growth and investing in our own company currently offer the most attractive returns,” Covenant President Joey Hogan said. “Based on our expectations regarding net cash flows after fleet investments for the next several quarters and our low leverage level, our board has increased the size of our repurchase authorization.”

Separately, the company also announced that it has promoted James “Tripp” Grant to executive vice president and chief financial officer and named Joey Ballard to executive vice president of People and Safety.